NCGA COMMENTS ON PROPOSED RFS PATHWAYS AND STANDARDS

JULY 2013

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(Posted Fri. Jul 26th, 2013)

July 26: The National Corn Growers Association submitted comments in the form of a letter from President Pam Johnson today to the House Committee on Energy and Commerce, responding to questions about the implementation of the Renewable Fuel Standard. In these comments, NCGA addresses corn ethanol-related questions about the Renewable Identification Numbers and Renewable Volume Obligations systems.

The letter begins by stressing how the RFS has succeeded in addressing a number of goals laid out at its creation.

“The Renewable Fuel Standard program is an ongoing success. Since its implementation in 2005 and revision in 2007 as RFS2, it has increased national energy security by creating a market for renewable fuel as a substitute for petroleum-based fuel thereby accelerating the nation’s progress toward energy independence. In addition, the RFS program has contributed to the reduction of greenhouse gas emissions, thereby reducing the nation's contribution to global climate change. This program has and will continue to have an overall positive impact on the U.S. economy, our national security and the nation’s health.”

Then, the comments address how the standard, as it is written, allows the EPA flexibility through the RIN and RVO systems. The letter does go on to note that EPA adherence to timelines would be beneficial in ensuring the standard and the mechanisms used in its implementation function properly.

“NCGA supports the current process used by the EPA to set annual volume obligations for required blenders. This method allows for an evaluation of the current technologies and provides a means to adjust blender requirements accordingly. However, for planning purposes, it would greatly benefit blenders to obtain the requirements in the year prior to the annual requirement.”

The letter also directly addresses questions pertaining to recent rises in the price of RINs by explaining that “the escalated RIN prices are most likely the result of speculation and lack of investment in infrastructure. Some of this is driven by uncertainty in the final RVO number required in 2013, which has yet to be provided to the industry. This speculation is largely confined between RIN generators and RIN consumers and is not reflected in consumer fuel prices. Additionally, RIN prices have been influenced by the limited amount of ethanol blended in transportation fuel, artificially capped by the petroleum industry to 10 percent. Increasing ethanol blends, as allowed by the current law, would significantly lessen pricing impact on RINs and is completely within the control of obligated parties.”

Providing factual evidence and sound analysis, the comments stress both the success of the existing RFS and the ways in which issues could be addressed through proper implementation.